The University of North Carolina Optional Retirement Program (ORP) is an option or alternative to the North Carolina Teachers’ and State Employees’ Retirement System (TSERS) for eligible faculty and staff. Under the ORP, you control your investment choices, distribution methods and retirement goals, whereas the State controls the investments under TSERS. There are two companies that offer investment products under the ORP: Fidelity Investments and TIAA
Employer and employee contribution percentages are established by the General Assembly. Employee contributions to the Optional Retirement Program are made on a pre-tax basis as provided under Section 414(h) of the Internal Revenue Code. As a result, the University will deduct the contribution from your pay before calculating federal or state income tax withholding.
- Currently, the employee contribution is 6% and the employer contribution is 6.84%. This amount cannot be changed.
Enrollment
Eligible employees hired on or after September 1, 2023, have 30 days from commencing employment to elect to enroll in the Optional Retirement Program. Failure to make an election within the 30-day time period will result in automatic membership in the Teachers’ and State Employees’ Retirement System (TSERS), the defined benefit plan. This consequence is irrevocable.
Note: NC State will take an after-tax “general retirement” amount of 6% of the base salary during the 30-day enrollment period. Once a retirement plan is selected, the general retirement amount is refunded and then sent to the selected vendor on a pre-tax basis.
| Hire Date | Enrollment Period | Enroll | Account Access |
|---|---|---|---|
On/After September 1, 2023 | 30 calendar days from hire/start date. Failure to enroll in your first 30 days will result in an irrevocable mandatory default into the TSERS plan. | Enrollment is completed via My Pack Portal>Employee Self Service>Benefits Details>My UNC Benefits
| ORP TIAA has been named single record keeper for the UNC System Plans. Those hired on/after September 1, 2023 must enroll with TIAA. Find out more about this decision here. |
Prior to September 1, 2023 | 60 calendar days from hire/start date. Failure to enroll in your first 60 days will result in an irrevocable mandatory default into the TSERS plan. | Online Enrollment is not available for those hired prior to September 1st.
| ORP Select an ORP carrier and set up your online account access. TIAA has been named single record keeper for the UNC System Plans. Those hired prior to September 1st still have a choice of vendors (below), however Fidelity participants will transition to TIAA at some point in 2024. Find out more here. |
On Campus Financial Planners
Meet with representatives from our retirement plan vendors for financial and retirement related advice. These certified financial advisers meet with employees at no cost or obligation to the employee and provide expert advice and resources to NC State Staff and Faculty. View Contact Information
What Is Vesting?
Employees who participate in the ORP are immediately 100% vested in their own contributions. An employee is considered fully vested after five years of participation in the ORP. If termination from employment occurs with less than five years of ORP participation, the employee becomes 100% vested in the ORP employer contribution provided all of the following requirements are met.
- Your new employer is a higher education institution that sponsors a substantially similar or “like” retirement plan
- The successor plan offers a “like retirement plan” that is underwritten by the carrier currently underwriting the Optional Retirement Program benefit.
- You begin participation in that successor plan as your “core retirement plan” within 12 months following your termination of eligible service in the plan (usually your termination of employment) with The University of North Carolina
Note: Future Optional Retirement Program plan distributions may be restricted by the Optional Retirement Program carrier and/or the new employer if an employee terminates from The University of North Carolina. Employees in the ORP who leave NC State employment should complete an ORP-3 form and submit it the HR Benefits Office.
How Are My Benefits Calculated?
Retirement benefit amounts are based on the total accumulation in the account(s) including any credited interest or dividends, your age, the age of your annuity partner, if applicable, and the income option selected. There are no age or service requirements to meet in order for a vested participant to begin receiving a benefit.
What Are My Retirement Payment Options?
TIAA makes available a variety of retirement payment options designed to help employees customize their overall retirement program to meet personal and family financial needs. These may be fixed annuity payments or payments on a variable basis, or a combination thereof.
Employees may also elect to receive a lump sum distribution, as permitted by the Optional Retirement Program carrier, or leave the balance on deposit to accumulate tax-deferred earnings until a retirement payment option is elected.
Note: To continue the State Health Plan coverage in retirement, the employee must elect and begin to receive a monthly retirement payment option from the ORP carrier.
Additional Benefits
If you become disabled, the total value of your Optional Retirement Program account is available for income benefits that will begin upon retirement.
In addition, participants of the Optional Retirement Program are covered under the North Carolina Disability Income Plan (DIPNC).
Voluntary supplemental disability benefits plans are available for long-term disability coverage; premiums are payroll deducted. The Standard Long Term Disability Plan is best suited for those employees who participate in the Optional Retirement Program.
In the event of the plan participant’s death, the total account value (employee and employer contributions) becomes 100% vested and available to the designated beneficiary(ies) on record. Contact your Optional Retirement Program carrier to update your beneficiary designation. If there is a need to change the beneficiary, contact the Optional Retirement Program vendor.
Retiree Health Benefits
When you retire and begin receiving monthly benefits from the ORP, you may also be eligible to enroll in the State Health Plan with the cost determined by when your employment started with the State. In all cases, the full cost of dependent coverage, if elected, must be paid by the retiree.
First Hired on/After January 1, 2021
- First Hired on/After January 1, 2021 – If you were hired on or after January 1, 2021, you will not be eligible to receive retiree or dependent medical benefits.
First Hired Prior to October 1, 2006
- If you were first hired prior to October 1, 2006, and retire with five or more years of ORP participation, the State will pay either all or most of the cost.
First Hired On/After October 1, 2006
- If you were first hired on or after October 1, 2006, in order to receive individual coverage at no cost, you must retire with 20 or more years of retirement service credit;
- If you have 10 but less than 20 years of retirement service credit, you will have to pay 50 percent of the cost for your coverage,
- With five but less than 10 years, you will have to pay the full cost for your coverage.
Based on current law, if you withdrew, transfer or rollover your entire ORP account, your first hire date is forfeited and will reset based on your re-employment date with the state. Upon termination/separation/retirement if you withdraw, transfer or rollover your entire ORP account you will forfeit your right to the State’s retiree group health plan coverage.
For more on Retiree Health Insurance, please visit the State Health Plan website.